Debate over Restitution Funds Leads to Internal Jewish Struggle

As the crusade for Holocaust restitution shifts from politics to the logistics of doling out payments, jockeying has begun over how to spend what may be hundreds of millions of dollars in as-yet unallocated funds.

Indeed, some observers suggest the question may be connected with the current power struggle atop the World Jewish Congress, a key player in the whole restitution odyssey.

With the WJC shakeup and disagreements over which issues the organization should now champion, it has raised the question of how to financially support whatever the new focus becomes.

Thus, attention has turned to the portion of the roughly $11 billion in restitution funds from Europe that is not specifically earmarked for survivors.

The WJC will not have sole — or even primary — control over the allocation of those funds, but key players at the WJC are involved with the Claims Conference, where much of the debate will play itself out.

“The irony is that when all these Jewish groups got together to fight for restitution, they were united against a common enemy and things were going beautifully,” said an American Jewish leader close to the proceedings. “But as soon as they saw money on the tip of the horizon, and coming in, they started fighting for control of who’ll give it out.”

The fate of unallocated restitution assets “is an important one to be addressed, but it certainly has no relationship with the restructuring at the World Jewish Congress,” said Steinberg, who will be leaving the group March 1 and assume the lay post of executive vice president.

“Let’s understand it: nearly all the funds are earmarked in one way or another. So only a very small fraction of the total recovery will be available.”

Still, as Steinberg noted, that may total hundreds of millions.

And the dispute may boil down to a question that’s been brewing for years: What is the best way to spend the “residual” funds in the interests of the Jewish people?

Is it to underwrite pro-Israel activities, Jewish education and identity-building in the Diaspora, or a combination of both?

From survivors, the response is unequivocal: neither.

“As a group, Holocaust survivors are the strongest supporters of Israel,” said Roman Kent, the longtime chairman of the American Gathering of Jewish Holocaust Survivors.

“But I don’t want to be involved in any philosophical discussion about for what purpose this money should be used. This money does not belong to Israel. It doesn’t belong to the Jewish community. This money is being returned in the name of survivors, so it belongs to the tens of thousands of needy survivors around the world who are not being helped enough, by the Jewish community or anyone else.”

Others, however, strongly believe that any leftover funds should be used to strengthen the Jewish people as a whole as a response to the Nazis’ attempt to destroy the Jewish people.

The past half-century have seen a dizzying array of reparations, particularly from the Germans and Austrians.

The largest has come from Germany, in the form of pensions.

Since 1952, the German government has disbursed some $47 billion in pensions to hundreds of thousands of survivors world-wide; the Israeli government is responsible for delivering these checks to survivors living in the Jewish state.

But restitution kicked into high gear in the 1990s.

Led by groups like the WJC, the Claims Conference and their allies, the Jewish world has won a number of important victories to gain “a measure of justice” for Holocaust victims and survivors:

According to Steinberg, they are:

The $1.25 billion Swiss banks settlement, which, with interest and expenses may run to $1.5 billion;

About $400 million so far in claimed insurance policies, still being negotiated by the International Commission on Holocaust-Era Claims; by completion, may run to $600-$700 million;

About $300 million from a Swiss “humanitarian” fund, for those slave labor-generated German profits processed by Swiss banks;

Roughly $300 million worth of reclaimed stolen artwork, but perhaps plenty more to come;

Up to $200 million of so-called “Nazi gold” looted from Jews;

An Austrian settlement of some $500 million, plus property restitution and social-welfare benefits that may push the total over $1 billion;

and tens of millions committed from Belgium and Spain, perhaps also from Liechtenstein in the near future, with possibly tens of millions more from elsewhere in Western Europe.

Heirs had until late 1992 to claim the erstwhile, Jewish-owned property; the Claims Conference was then named “successor organization” and entrusted to sell the property.

The Claims Conference has so far sold off some 50 to 60 percent of the assets, beginning with the most valuable properties.

With the revenues, the Conference decided that 80 percent should go to institutions and agencies that care for needy Holocaust survivors, such as home-nursing care, nursing homes and psychiatric hospital wards, Kessler-Godin said.

The remaining 20 percent has gone toward Holocaust research, education and documentation. The Claims Conference was, for example, a main funder of an expansion and the new archives and library buildings at Yad Vashem.

To date, the Claims Conference has disbursed about $500 million in grants, Kessler-Godin said.

The balance is held in a “Goodwill Fund,” which pays out to property owners or heirs who did not file claims by the German-mandated deadline of Dec. 31, 1992, and is money set aside for future needs for survivors for a time when less revenue is coming in, she said.

“The funds that we have are not nearly enough to provide for the needs of every organization that applies,” she said.

All the talk of “billions” causes heartache for survivors, say their advocates, partly because they feel they are not receiving a satisfactory portion of it, partly because the public thinks they are.

“The glitter of gold being depicted by the media is so obscene, it makes the average person on the street believe that every survivor is now a millionaire,” Kent said.

It’s too early to tell exactly how much restitution money may be left over, say those involved. Plenty of misinformation and disinformation have swirled on the matter.

But according to Steinberg, the primary sources of as-yet-unallocated funds will be:

potentially hundreds of millions from unpaid insurance policies;

potentially hundreds of millions from selling the remainder of heirless East German properties, which would be distributed according to the same 80/20 ratio, according to Kessler-Godin;

and perhaps tens of millions from the Swiss humanitarian fund.

The WJC will not be the sole arbiter in deciding how these funds are spent.

But it’s clearly a prominent voice within the 24-member Claims Conference, which handles restitution from Germany and Austria, and the 10-member World Jewish Restitution Organization, which manages reparations from the rest of Europe.

Edgar Bronfman, president of the WJC, was the WJRO chairman and chairs the Claims Conference’s Investment Committee; Singer is a Conference vice president, was its lead negotiator with Germany and Austria, and sits on five of the Conference’s 15 committees.

“I negotiated the settlements, I recovered it, and let me tell you, as long as there’s a Holocaust survivor in need, they are the primary beneficiaries,” Singer said.

“It should be distributed as quickly as possible, so there shouldn’t be any left.”

“But if there is, it should be used to revitalize and create a renaissance for the Jewish people,” he said.

Several involved said they hope the broadest possible Jewish coalition, including the Israeli government, will decide these uses.